Advertisers launch transatlantic attack on Google-Yahoo deal
A major global group of advertisers is seeking to block the Yahoo-Google ad deal through Europe’s legal system. Meanwhile an anti-trust group says the deal should be allowed, but only with tighter restrictions.
The World Federation of Advertisers, made up of 55 national industry groups, has asked the European Commission to block the partnership despite it only affecting North American sites.
The organisation argues that the deal will “have a detrimental effect on competition, result in price increases and reduce the options available to advertisers worldwide.” It also says that the partnership will be so favourable to Yahoo and Google in the US and Canada that they could feel less pressure to put efforts into competing in other countries.
The group includes member bodies in Canada and the US; the latter, the Association of National Advertisers, has already protested the deal.
Meanwhile the American Antitrust Institute, an independent ‘think tank’, says the deal should go ahead as blocking it risks Microsoft buying Yahoo completely; the AAI argues that would be even more detrimental to competition in the online ad market. However, the group says the Justice Department should insist Yahoo is not allowed to replace its own ads with those from Google, and that the two firms should be barred from setting minimum prices when auctioning ad slots.
Apparently feeling the heat, Yahoo is creating the Digital Advisory Council, an advisory panel that will include representatives from firms which advertise through Google’s web system. Officially the panel is designed to create “dialogue” between the two web firms and advertisers, though at this stage it seems pretty clear it’s an attempt to deflect more formal measures to keep Google and Yahoo in check.
Meanwhile Google’s advertising head Tim Armstrong has argued that the additional revenue from the deal will allow Yahoo to improve its ad services and compete more strongly against both Microsoft and Google itself. He’s also pointed out that there’s in the agreement nothing to stop Yahoo making a similar partnership with other firms.
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